GoGreen Home: Additional Funding to Expand Financing Eligibility
Update: November 2023
On November 4th, 2023, an amendment to the MOA between the GoGreen Home Energy Financing Program and the Technology and Equipment for Clean Heating (TECH) Initiative will come into effect. This amendment will exclude the financed cost of a Cool Roof electric measure from being eligible for TECH credit enhancement funds if the measure is approved for financing after this date. This only applies to projects at a property receiving gas service from an investor-owned utility (IOU) and electric service from a publicly owned utility (POU). Friday November 3rd, 2023, is the last day that GoGreen Home Lenders may approve for financing the installation of a Cool Roof at properties receiving this combination of IOU/POU service. GoGreen Home Contractors should likewise adjust their sales planning with this deadline in mind. All other financed electric measures at these properties remain eligible for credit enhancement.
More information about the funding relationship with TECH and this amendment is below.
Update: October 2023
As of October 31, 2023, additional funding for the GoGreen Home Program will be available through a funding relationship with the City of Palo Alto Utilities (CPAU). This funding will expand the equipment and related costs eligible for credit enhancements through GoGreen Home to all CPAU customers, providing new options for financing energy efficiency upgrades and decarbonization for more California residents.
CAEATFA previously received additional funding from the Technology and Equipment for Clean Heating (TECH) Initiative in February 2022; this funding relationship continues and is not affected by the addition of CPAU funding.
The expansions facilitated by TECH and CPAU funding will reduce complexity for participating GoGreen Home lenders and contractors, allow GoGreen Home to serve more California customers, and ultimately realize greater energy savings and progress toward building energy efficiency and decarbonization goals.
More information about the funding relationships with TECH and CPAU is below.
Background
The California Hub for Energy Efficiency Financing (CHEEF) was originally authorized by the California Public Utilities Commission (CPUC) and funded through Public Purpose Program (PPP) funds paid for by ratepayers of the California IOUs. The California IOUs are Pacific Gas & Electric, Southern California Gas Company, San Diego Gas & Electric Company and Southern California Edison Company. The funds are used for administration as well as to offer credit enhancements to participating lenders that enable them to offer more advantageous terms to borrowers for energy efficiency loans than they otherwise could. CPUC rules and the source of funding have resulted in CAEATFA regulations for the GoGreen Financing programs that restrict participation to customers of the IOUs. Additionally, the regulations have limited the eligibility of energy efficiency measures for which finance companies can receive a credit enhancement, as well as the loan principal for which lenders can receive reimbursement in the event of a default, to those utilizing a fuel provided by an IOU. This has made impactful but costly energy efficiency upgrades like heat pumps virtually inaccessible for the millions of Californians served by a gas IOU but an electric POU. These limitations have also resulted in a web of eligibility complexity based on utility jurisdiction that frustrates contractors and lenders, and which CAEATFA believes has hampered participation in GoGreen Home.
(Follow the links for more information about GoGreen Home and the California Hub for Energy Efficiency Financing, or CHEEF.)
In August 2021, in response to CAEATFA seeking solutions that would enable simpler programs with more uniform eligibility across the state, the CPUC issued Decision 21.08.006. This decision authorized CAEATFA to incorporate additional sources of funding into the CHEEF, beyond the PPP IOU ratepayer funds, and to utilize these funds to expand eligibility to non-IOU customers and/or expand the types of measures for which lenders are eligible for a credit enhancement to non-IOU fuel utilization measures.
Per GoGreen Home Program Regulations, if additional funding becomes available from a source outside of the PPP IOU ratepayer funding, CAEATFA will invite stakeholders to join an Interested Parties list as well as publish an explanation of how the funding expands eligibility for GoGreen Home.
Interested Parties List
Sign up to join the “CHEEF Additional Funding” Interested Parties list and be notified when GoGreen Home has access to additional funding to expand financing eligibility.
CAEATFA and CPAU Agreement to Collaborate
About the City of Palo Alto Utilities
The City of Palo Alto Utilities offers residents and businesses a full suite of City-owned and -operated utility services including electricity and natural gas. CPAU encourages customers to consider electrification, a shift from fossil fuels to electricity, for space and water heating, transportation and cooking. For more information on CPAU, please visit the CPAU webpage.
The CAEATFA and CPAU Agreement
CAEATFA and CPAU entered into a Memorandum of Agreement (MOA) on September 11, 2023. Through this collaboration, CPAU will provide funds for credit enhancements as well as administrative support for GoGreen Home–financed projects for properties receiving service from CPAU. CPAU will provide a maximum of $300,000 toward the collaboration with CAEATFA and the GoGreen Home program. CPAU’s commitment to contribute funds for credit enhancement will expire on September 11, 2025, although CAEATFA and CPAU may mutually agree to extend the Agreement for three additional years, or to amend the Agreement to adjust Program funding in the event CPAU customer participation exceeds estimates.
Without incorporation of CPAU funding, consistent with guidelines set by the CPUC, the GoGreen Home Regulations require that eligible properties must receive fuel from an IOU. As CPAU customers receive both gas and electricity from CPAU, they have previously been ineligible for GoGreen Home. Incorporation of CPAU funds will expand GoGreen Home financing eligibility to CPAU customers for the first time.
Funder Criteria
CPAU is providing funding for credit enhancements available to lenders for loans that:
- Upgrade an existing property served by CPAU
- Contain costs for the following:
- Measures on the CAEATFA list of Eligible Energy Efficiency Measures CAEATFA list of Eligible Energy Efficiency Measures (per GoGreen Home Regulations Section 10009.10(j));
- Legal and practical costs of installation (such as the cost of procuring permits or upgrading electrical panels) per Section 10091.1(s)(2)(A);
- Additional related home improvement costs per Section 10091.1(s)(2)(B).
- Otherwise meet eligibility requirements for GoGreen Home
CAEATFA and TECH Agreement to Collaborate
About TECH
The TECH Clean California Initiative (TECH) is a market transformation program designed to accelerate adoption of commercially available, low-emission space and water heating equipment technologies (primarily air source heat pumps and heat pump water heaters). TECH was developed as part of California Senate Bill 1477 and is funded by California gas corporation ratepayers under the auspices of the California Public Utilities Commission. The TECH implementation contract was awarded to Energy Solutions in November 2020. For more information on the TECH initiative, please visit the TECH Clean California homepage.
The CAEATFA and TECH Agreement
CAEATFA and Energy Solutions entered into an MOA on February 7, 2022. Through this collaboration, Energy Solutions will provide TECH funds for credit enhancements as well as administrative support for GoGreen Home–financed projects for properties receiving gas service from an IOU and electric service from a POU. Energy Solutions will provide a maximum of $1.5 million toward the collaboration with CAEATFA and the GoGreen Home program. This amount includes an initial firm commitment of $500,000 in credit enhancements. Additional credit enhancement funds beyond the first $500,000 were committed by Energy Solutions upon observation of sufficient deal flow that justified additional funds. Energy Solutions’ commitment to contribute funds for credit enhancement will expire on July 1, 2033.
Incorporation of TECH funds expanded financing eligibility to electric energy efficiency measures that have until now been ineligible for credit enhancement under GoGreen Home program limitations.
Amendment to CAEATFA’s Agreement with TECH
On November 4th, 2023 an amendment to the MOA negotiated between CAEATFA and TECH will come into effect removing Cool Roofs from being eligible for receipt of TECH credit enhancement funds if approved for financing after this date. Friday November 3rd, 2023, is the last day that GoGreen Home Lenders may approve for financing the installation of a Cool Roof at a property receiving electricity from a POU and gas from an IOU. GoGreen Home Contractors should likewise adjust their sales planning with this deadline in mind. All other financed electric measures remain eligible for credit enhancement at these types of properties.
Funder Criteria
Energy Solutions is providing funding for credit enhancements available to lenders for loans that:
- Upgrade a property served by a gas IOU and electric POU
- Contain measures on the CAEATFA list of
Eligible Energy Efficiency Measures that correspond to an electric fuel source (per
GoGreen Home Regulations Section 10009.10(j))
- Friday November 3rd, 2023, is the last day that the Cool Roof electric measure shall be eligible for installation and financing approval by a GoGreen Home Participating Lender for properties receiving gas from an IOU and electricity from a POU.
- Otherwise meet eligibility requirements for GoGreen Home
Eligibility Expansion
Without incorporation of TECH funding, consistent with guidelines set by the CPUC, the GoGreen Home Regulations require that 70% of the loan value that receives a credit enhancement, or “Claim-Eligible Principal” (meaning it qualifies for reimbursement in the event of a charge-off), be for measures that correspond to an IOU fuel source.
With incorporation of TECH funds, the Claim-Eligible Principal may now also include the following, if the borrower receives gas service from an IOU, regardless of electricity provider:
- Eligible Energy Efficiency Measures that correspond to an electric fuel source per Section 10091.10(j) of the GoGreen Home Regulations (except for the Cool Roof electric measure);
- Legal and practical costs of installation (such as the cost of procuring permits or upgrading electrical panels per Section 10091.1(s)(2)(A) (except those related to the installation of a Cool Roof);
- Additional related home improvement costs per Section 10091.1(s)(2)(B).
GoGreen Home expansion of measures eligible for credit enhancement with incorporation of TECH funding
| Customer’s Gas Provider | Customer’s Electric Provider | |
|---|---|---|
| IOU | POU or Co-op | |
| IOU | No change. Claim-Eligible Principal may fund any combination of gas or electric measures. | Limit on electric measures comprising 30% of Claim-Eligible Principal will be removed. Lenders may receive a credit enhancement for electric measures (except Cool Roofs) up to the loan maximum. |
| POU or Co-op |
No change. Gas measures remain limited to 30% of Claim-Eligible Principal. TECH funding cannot be spent in non-IOU gas territory. | No change. Customers remain ineligible for the Program as they are not served by an IOU. |